BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...

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BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...
2019/2020
BUDGET
APRIL 2019
Submission to the University of British Columbia
Board of Governors
BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...
Table of Contents
      TABLE OF CONTENTS.........................................................................................................................................2
      1. EXECUTIVE SUMMARY ...................................................................................................................................3
         Overview ............................................................................................................................................................3
         Economic Environmental Scan ..........................................................................................................................4
         Strategic Investments ........................................................................................................................................5
         Base Operations ................................................................................................................................................6
      2. INTRODUCTION (“BUDGET 101”) ..................................................................................................................8
         The Budget Process ..........................................................................................................................................8
         Budget Framework .............................................................................................................................................9
      3. OPERATING BUDGET ................................................................................................................................... 11
         Operating Revenue ......................................................................................................................................... 11
         Operating Expenditures .................................................................................................................................. 14
      4. UBC VANCOUVER......................................................................................................................................... 16
         Strategic Initiatives .......................................................................................................................................... 16
         Academic Funds (formerly the Strategic Investment “Excellence” Fund) ...................................................... 18
         UBC Vancouver Faculties and Departments – Allocations and Projected Expenses .................................... 21
      5. UBC OKANAGAN .......................................................................................................................................... 25
         Strategic Initiatives .......................................................................................................................................... 25
         UBC Okanagan Excellence Fund ................................................................................................................... 27
         UBC Okanagan Faculties and Departments – Allocations and Projected Expenses ..................................... 30
      6. CONSOLIDATED FINANCIAL BUDGET ....................................................................................................... 33
      7. CAPITAL EXPENDITURE .............................................................................................................................. 36
      8. DOCUMENTS REQUIRING BOARD APPROVAL ........................................................................................ 37
      APPENDIX I – KEY BUDGET ASSUMPTIONS ................................................................................................. 39
      APPENDIX II - FINANCIAL RISKS .................................................................................................................... 40
      APPENDIX III - ENDOWMENT ........................................................................................................................... 41
      APPENDIX IV - RELATED ENTITIES ................................................................................................................ 42
      APPENDIX V - KILLAM ENDOWMENT FUNDS ............................................................................................... 43
      APPENDIX VI – CAPITAL DETAILS ................................................................................................................. 44
      APPENDIX VII – INVESTMENT INCOME ON LAND DEVELOPMENT ............................................................ 48
      APPENDIX VIII – FISCAL 2019/20 PLAN TO FISCAL 2018/19 FORECAST BY FACULTY/PORTFOLIO .... 50

Pictured on front: The Indian Residential School History and Dialogue Centre, opened in 2018.

UBC 2019/2020 BUDGET                                                                                                                                               Page 2 of 76
BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...
1. Executive Summary
     Overview

     We are pleased to present the 2019/20 Budget for The University of British Columbia.

     UBC ranks among the leading public universities in the world, and contributes extensively to the economic and
     wider prosperity of British Columbia, as well as Canada and beyond. The annual budget supports the collective
     vision, purpose, values, and goals of the institution, as identified in the university’s new strategic plan (Shaping
     UBC’s Next Century, Strategic Plan 2018 – 2028). This Budget Report presents the operating and consolidated
     budget for the university, which aims to continue the university’s ongoing endeavors and to identify new
     opportunities for extending research, teaching, and engagement.

     The UBC Operating Budget reflects the operations of both campuses of the university, including capital
     spending and income earned from land development proceeds endowments, but excluding restricted funding in
     research and endowments.

     OPERATING BUDGET FISCAL 2019/20                        Fiscal 17/18         Fiscal 18/19         Fiscal 19/20
     (In $millions)                                            Actual             Forecast              Budget

     Operating Revenue
        Provincial government grants                                       615                  637                  657
        Tuition                                                            607                  689                  754
        Others                                                             728                  778                  785

     Total Operating Revenue                                          1,950                2,104                2,196

     Operating Expenditures
        Salaries & benefits                                           1,158                1,242                1,349
        Non Salaries                                                       770                  858                  907

     Total Operating Expenditures                                     1,928                2,100                2,256

     Reserve (drawdowns) / additions                                       22                    4               (60)

     Core revenues are fully allocated towards the cost of continuing the current base operations, as well as
     investing in new strategic initiatives to meet university priorities. Revenues are forecast to increase by $92m
     (from $2,104m in fiscal 2018/19 to $2,196m in fiscal 2019/20), which will be allocated to faculties, the Strategic
     Investment or “Excellence” Funds (proposed to be renamed the Academic Funds) and strategic initiatives.

    The budgeted operating deficit of $60m is the result of planned one-time investments from accumulated
    reserves, notably the Academic Funds, capital investments on the Okanagan campus and one-time expenses
    for enterprise-wide IT systems.

    The university’s consolidated budget assumes annual revenues of $2.8b of which $2.2b are from the
    university’s core operations, as identified in the table above. Adjusting for unrestricted surpluses in research
    and endowments, as well as a net investment in capital, the university expects a consolidated surplus for fiscal
    2019/20 of $30m as detailed in section 6.

UBC 2019/2020 BUDGET                                                                                                       Page 3 of 76
BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...
Economic Environmental Scan

     International
     UBC is a globally-recognized centre for teaching, learning, and research, and an important contributor to the
     landscape of international education. The institution is consistently ranked as one of the top 20 public
     universities in the world, and is recognized as having the most international outlook of any university in North
     America. This position has created opportunities for UBC to attract talented students and researchers from
     over 160 countries, and has opened doors for the university to engage with global challenges that have far-
     reaching impact.

     International student enrolment continues to show strong demand, and combined with increases in
     international tuition has provided an important source of revenue for the university. This revenue base now
     supports the UBC Academic Funds (formerly the Strategic Investment or “Excellence” Funds), and contributes
     to student financial aid as well as UBC’s strategic investments.

     Domestic
     While the overall economic environment UBC faces in the year ahead continues to be constrained in a number
     of aspects, it does include an uplift in funding from the provincial government for general wage increases, a
     continuing commitment to improving routine capital funding (deferred maintenance on academic facilities), as
     well as significant contributions to several building projects in partnership with the federal government’s
     “Strategic Investment Fund.”

    In March 2017, the provincial government announced additional funding to increase students’ access to
    technology-related programs. In the 2019/20 fiscal year, the Ministry of Advanced Education, Skills & Training
    will fund an additional 136 FTEs for Computer Science, Biomedical Engineering, and Manufacturing
    Engineering at the Vancouver campus, and 44 FTEs for Computer Science and Manufacturing Engineering at
    the Okanagan campus. These opportunities will be created with $2.6m of incremental funding.

    One-time funding from the Ministry of Advanced Education, Skills & Training will also add 36 new FTEs in Early
    Childhood Education, and 15 new FTEs in the Master of Nursing Practitioner programs on the Vancouver
    campus for fiscal 2019/20.

    UBC
    The university’s main campuses in Vancouver and the
    Okanagan are home to world-class facilities that foster
    cutting-edge research, innovative entrepreneurship,
    and boundless academic and extracurricular
    opportunities. The campuses, as well as UBC’s satellite
    locations around British Columbia, also represent
    important social and economic contributions to their
    respective communities and beyond. The university
    projects 49,456 undergraduate (+0.7 per cent) and
    9,135 graduate students (+2.6 per cent) in fiscal
    2019/20.

                                                                Students celebrating at Imagine UBC, a campus orientation for
                                                                new students held every September.

UBC 2019/2020 BUDGET                                                                                                 Page 4 of 76
BUDGET 2019/2020 APRIL 2019 - Submission to the University of British Columbia Board of Governors - The University of British ...
Strategic Investments

     Priority Operating Investments
     The 2019/20 Budget includes a number of new investments in strategic priorities and operating initiatives.
     Incremental operating revenue will provide the capacity to meet a wide number of important needs and
     opportunities. The new investments support the core areas and priorities of the 2018-2028 UBC Strategic Plan.

     The recommendations are the result of extensive consultations across the Vancouver campus that included
     senior leadership, faculty, staff, and students. A budget advisory group conducted a thorough review of the
     detailed proposals, including feedback from the group consultations and provided their recommendations to the
     Provost & Vice-President Academic, the Vice-President Finance and Operations, and the Executive.

     The areas selected for new funding follow the themes identified in the UBC Strategic Plan, which include:

     • Strategic Themes

          •   People and Places
          •   Research Excellence
          •   Transformative Learning
          •   Local and Global Engagement

     • Sustainment/Compliance/Operations/Risk Mitigation

     In fiscal 2019/20 a total of $36.9m has been recommended for the Vancouver campus, and in some cases
     system-wide, with some of the most notable investments being in IT systems and infrastructure, Aboriginal
     learning and relationships, expanded Collegia for first-year students, the Library (exchange rate equalization),
     the Independent Investigations Office, UBC brand positioning, and classroom upgrades. The Okanagan
     campus is recommending $10.3m in strategic investments.

     UBC Academic Funds
     UBC is a globally recognized centre of research and educational excellence, and its goal is to enhance this
     excellence through targeted strategic investments on both campuses. The Academic Funds (formerly the
     Strategic Investment or “Excellence” Funds) were established in February 2016 to support UBC’s ambition to
     become Canada’s best university over the
     next decade.
                                                     A total of $68.2m of funding is planned in the
     The funds support strategic initiatives that    2019/20 fiscal year with some of the most
     will enhance and amplify current efforts in
                                                     notable being: increased student financial aid;
     key areas to ensure UBC is:
                                                     President’s International Doctoral Student
     • Recruiting and retaining exemplary            Awards; President’s Recruitment Awards;
       students, faculty, and staff
                                                     Work Learn opportunities for students;
     • Building and supporting world class           Research Clusters and Digital Research
       research infrastructure to enable             Infrastructure operations.
       innovative, cutting-edge research
     • Providing an excellent student learning
       experience for domestic and international students, at the graduate and undergraduate levels, both inside
       and outside the classroom

UBC 2019/2020 BUDGET                                                                                          Page 5 of 76
Given the limitations of a single fund, and the current terms of reference, to achieve the desired goals the
     following stratification of the fund, for the Vancouver campus, is being proposed:

     • Strategic Excellence Fund

     • Revenue Sharing Fund

     • Student Financial Aid Fund

     • Academic Capital Fund
     • Integrated Renewal Project Fund

     A total of $68.2m of funding is planned for the Vancouver campus in the 2019/20 fiscal year with some of the
     most notable being: increased student financial aid; President’s International Doctoral Student Awards;
     President’s Recruitment Awards; Work Learn opportunities for students; Research Clusters; and Digital
     Research Infrastructure operations. A total of $8.9m is also planned for the Okanagan campus.

     Base Operations

     Operating Revenue
     UBC’s operating revenue is generated from government grants, tuition revenue, land proceeds, and faculty and
     central unit revenues. The Provincial Grant has in recent years increased only for funded general wage
     increases (GWI) for core operations, and incrementally funded seats for specific programs, with any funding
     required for strategic initiatives provided from incremental tuition and business revenues.

     Operating Costs
     The Operating Budget, covering the core academic operations of the university, includes elements of new
     investments in programs and services, as well as providing resources necessary to maintain current activities.

                                                                UBC continues to be challenged in meeting the other
     The Canadian Dollar continues to provide                   growing costs of our teaching, research, and support
                                                                services. The Canadian dollar is currently trading at
     challenges in key import costs, including                  approximately $0.75 relative to the U.S. dollar, and
     library subscriptions and monographs, and                  provides challenges in key import costs, including
     research equipment.                                        Library subscriptions and monographs, and research
                                                                equipment.

    Savings from efficiencies continue to make an important contribution to providing the capacity for both new
    investments and maintaining current activity levels. The university will need to continue to focus on the delivery
    of ongoing efficiencies to optimize its teaching, learning, and research outcomes.

    Capital Expenditure
    The capital program for fiscal 2019/20 continues to be extensive, with $525m of total expenditure budgeted. A
    notable feature in the year ahead is the continued expansion of funding from the Provincial Government for
    “routine capital.” This expenditure principally focuses on the deferred maintenance associated with our
    academic facilities, and is budgeted to be $50m in fiscal 2019/20. (Note that this expenditure includes a 25 per
    cent matching contribution from UBC.)

UBC 2019/2020 BUDGET                                                                                           Page 6 of 76
Major building projects under development include the Pacific Residence (Walter Gage Infill Site), Brock
     Commons Phase 2, Okanagan Nechako Housing Commons and Skeena Residence, the Undergraduate Life
     Sciences Teaching Labs, UBC Vancouver Bus Exchange, and the MacInnes Field Parkade. Please refer to
     section Appendix VI Capital Details for further information.

     A rendering of the planned Nechako Housing Commons and Skeena Residence, under development on the Okanagan campus.

     UBC’s student, finance, and human resources enterprise IT systems were implemented over 20 years ago and
     are in desperate need of renewal. The university is committing $12m of recurring funds in this year’s budget,
     with a further $16.5m in fiscal 2020/21 to fund the loan repayments for the replacement of these systems.

UBC 2019/2020 BUDGET                                                                                                  Page 7 of 76
2. Introduction (“Budget 101”)
     The UBC Budget represents the financial plan for the university — it serves as a roadmap for allocating all of
     the university’s revenues against anticipated expenses. It uses the prior year’s allocations as a starting point to
     identify recurring funding, and considers enhancement requests and the distribution of incremental revenue to
     fund strategic initiatives and manage cost pressures. The model used at UBC is decentralized, meaning that
     faculties and administrative units are responsible for balancing budgets within their respective portfolios. The
     budget process includes the following key assumptions with regard to revenues and expenses:

     • Funding from the provincial government
     • Tuition levels and student numbers

     • Revenue forecasts from other sources

     • Salary and benefit increases
     • Other cost increases, in line with on changes to the consumer price index (CPI) or the Higher Education
       Price Index, and currency exchange rates

     These budget assumptions (summarized in Appendix I) include all proposed budget allocations, as well as
     projections made by faculties and units from both campuses (Vancouver and Okanagan) of expected results
     for the year, including any plans for drawdowns of reserves. The budget for each campus is determined
     separately but both are combined in this report, with supporting details provided for each.

     The Budget Process
     Extensive consultation and engagement with the university community is a cornerstone of the budget process,
     to ensure the successful combination of university-wide projections and analysis with faculty and administrative
     unit plans. To create the budget this year UBC’s financial teams have collaborated with:

     • Deans

     • Senate Budget Sub-Committees of the Budget
                                                               Extensive consultation and engagement
       Committee of the Council of Senates (Vancouver
       and Okanagan)
                                                               with the university community is a
                                                               cornerstone of the budget process.
     • Elected student leadership
     • Heads and Directors of academic departments
       and schools

     • Associate Vice-Presidents (and equivalent)
     • Executive

UBC 2019/2020 BUDGET                                                                                            Page 8 of 76
A general timeline illustrating the budget development process is as follows:

     The Budget is presented for the approval of UBC’s Board of Governors, and covers the fiscal year from April 1,
     2019 to March 31, 2020.

     Budget Framework
     The most significant component of the university’s Consolidated Budget is the Operating Budget, which covers
     the core academic operations of UBC. This report also covers all other areas comprising the consolidated
     financial statements of the university, including research, endowment, and capital expenditure. The intention of
     the Budget Report is to illustrate how these pieces link together, as well as the financial targets for each.

     A simple picture of university’s Consolidated Budget is as follows:

              Provincial grant                                       Faculty teaching and
              Domestic tuition                                             research

            International tuition               Operating
                                                                       Academic Funds
             Research indirects                  Budget

             Investment income                 $2.2 billion
                                                                      UBC-wide services
             Business revenue

             Land Development
                                                                     Ancillary operations
              Faculty revenue

        Central support unit revenue

              Research grants                  Restricted             Research projects
                                                 funds
                Endowment                      $0.6 billion          Endowment spend

     Plans for capital expenditure are summarized later in this report, including projections for major projects
     approved separately by the Board of Governors, as well as other planned minor capital expenditure.

UBC 2019/2020 BUDGET                                                                                           Page 9 of 76
The Operating Budget includes income received by the university to support core academic operations. This
     revenue includes the provincial operating grant, domestic and international tuition, investment income earned
     on cash and investments, research overheads and indirect costs of research funds received from the federal
     government, and investment income earned from land development proceeds. It also includes other revenue
     generated by central units and ancillaries across campus that directly support those operations, including
     student housing, food services, the UBC Bookstore, and parking. Many faculties also receive funding directly
     from non-core activities, which are managed locally to directly support their operations.

     The financial target for the Operating Budget is to achieve a near balanced result. This means that operating
     revenue and expenditures (which include ongoing capital costs and internal loans for capital projects) are at
     equivalent levels.

                                                                           The Province of BC provides an operating grant
                                                                           totaling $657m to the university to support the
                                                                           teaching of domestic undergraduate and graduate
                                                                           students in selected programs. Of this, $585m is
                                                                           designated for UBC Vancouver and $72m for UBC
                                                                           Okanagan. In return, the university enrols 29,877
                                                                           full-time domestic undergraduates and 5,812
                                                                           graduate students in Vancouver, and 7,025 students
                                                                           overall in the Okanagan. There are some specific
                                                                           enrolment targets, primarily in the health sector and
                                                                           in line with the provincial government’s Skills for
                                                                           Jobs Blueprint. UBC expects to exceed the
                                                                           provincial enrolment targets by approximately 1,200
     A big part of new student success is mental and physical wellbeing.   domestic undergraduate students and 3,200
                                                                           graduate students.

    UBC allocates tuition received via formula to the faculties and to student financial aid (SFA). In Vancouver, we
    allocate approximately 7.5 per cent of incremental tuition to support student financial aid for both international
    and domestic students. Of the remainder, 75 per cent of graduate and domestic undergraduate tuition and 65
    per cent of international undergraduate tuition flows directly to the faculties to support direct teaching costs. In
    the Okanagan, after SFA, 60 per cent of domestic and 50 per cent of international tuition is allocated to the
    faculties. The remainder is allocated for strategic priorities and core and support services. Since 2015/16, both
    campuses have set aside two-thirds of the international undergraduate tuition rate increases to support the
    Strategic Investment “Excellence” Fund.

UBC 2019/2020 BUDGET                                                                                                   Page 10 of 76
3. Operating Budget
     The Operating Budget (Vancouver and Okanagan combined) is summarized in the statement below.

     Total revenue is budgeted to increase by $93m (4.4 per cent) with the most significant increase arising from
     international tuition. Expenses are expected to increase by approximately $160m (8.6 per cent) with a range of
     factors including salary obligations.

     OPERATING BUDGET FISCAL 2019/20
                                                    Fiscal 17/18         Fiscal 18/19        Fiscal 19/20
     (In $millions)                                    Actual             Forecast             Budget

     Operating Revenue
        Provincial government grants                            615                  637                 657
        Tuition                                                 607                  689                 754
        Investment income                                          41                   51                  58
        Research indirects                                         37                   35                  34
        Business revenue                                           28                   35                  35
        Land development proceeds                                  24                   31                  33
        Faculty revenue                                         182                  187                 181
        Central support unit revenue                            416                  439                 444

     Total Operating Revenue                                  1,950                2,104               2,196

     Operating Expenditures
        Salaries & benefits                                   1,158                1,242               1,349
        Operating costs - other                                 471                  527                 569
        Cost of goods sold                                         43                   43                  50
        Grants to third parties                                    1                    1                   1
        Interest expense                                           51                   53                  57
        Capital spending                                        143                  154                 162
        Transfers to non-operating funds                           60                   80                  68

     Total Operating Expenditures                             1,928                2,100               2,256

     Surplus / (Deficit)                                           22                   4                (60)

     Operating Revenue

     The Operating Budget includes all unrestricted revenue received by the university. The majority of this revenue
     is managed and allocated through the budget process, but a smaller portion is generated directly by faculties

UBC 2019/2020 BUDGET                                                                                        Page 11 of 76
and central support units. The total revenue managed through the budget process in fiscal 2019/20 is $1,571m,
     with an additional $626m of operating revenue generated directly by units.

     OPERATING REVENUE                          UBC Vancouver                                   UBC Okanagan                                  UBC Total
     (in $millions)                 Actual    Forecast Budget Budget             Actual       Forecast Budget Budget         Actual       Forecast Budget Budget
                                    Fiscal     Fiscal  Fiscal    vs.             Fiscal        Fiscal  Fiscal    vs.         Fiscal        Fiscal  Fiscal    vs.
                                    17/18      18/19    19/20 Forecast           17/18         18/19    19/20 Forecast       17/18         18/19    19/20 Forecast

     Provincial government grants       546           567     585          18         69           70         72        2        615          637            657        20
     Undergraduate tuition
        Domestic                        193           200     207           7         35           37         39        2        228          237            246         9
        International                   268           318     359          41         32           46         54        8        300          364            413        49
     Graduate tuition                    75            82       88          6             4         6          7        1            79        88             95         7
     Investment income                   41            51       58          7             -         -          -         -           41        51             58         7
     Research revenue                    36            34       33         (1)            1         1          1         -           37        35             34        (1)
     Business revenue                    27            33       33           -            1         2          2         -           28        35             35             -
     Land development proceeds           24            31       33          3             -         -          -         -           24        31             33         3

     Subtotal                         1,210      1,316       1,396         81        142          162     175          13      1,352         1,478       1,571          94

     Faculty revenue                    181           186     180          (6)            1         1          1         -       182          187            181        (6)
     Central support unit revenue       406           428     435           7         10           11          9       (2)       416          439            444         5

     Total Operating Revenue          1,797      1,930       2,011         82        153          174     185          11      1,950         2,104       2,196          93

     Provincial Government Grant
     The government grant is the primary source of funding for domestic undergraduate and some graduate
     teaching. Operating revenue is up $20m in fiscal 2019/20 largely due to funding for general wage increases
     (GWI) for all bargaining units and FTE growth in technology-related programming expansion.

     Tuition Income
     Student enrolment
     The university is projecting a total enrolment of 58,591 student FTEs in fiscal 2019/20 across both campuses;
     details as follows:
     Student Enrolment
                                                        Fiscal 18/19                                          Fiscal 19/20 (Projected)
                     Student FTE                                                                                                                               Change
                                    Vancouver            Okanagan           Total UBC             Vancouver          Okanagan          Total UBC

     Undergraduate
             Domestic                        31,111              6,626             37,737               31,129               6,775              37,904               0.4%

             International                   10,032              1,327             11,359               10,079               1,473              11,552               1.7%

             Total                           41,143              7,953             49,096               41,208               8,248              49,456               0.7%

     Graduate                                 8,128                  779            8,907                8,330                805                    9,135           2.6%

     Total                                   49,271              8,732             58,003               49,538               9,053              58,591               1.0%

     Undergraduate Student Intake
                                                        Fiscal 18/19                                          Fiscal 19/20 (Projected)
               Student Headcount                                                                                                                               Change
                                    Vancouver            Okanagan           Total UBC             Vancouver          Okanagan          Total UBC
             Domestic                        11,402              1,877             13,279               11,586               1,964              13,550               2.0%
             International                    3,744                  522            4,266                3,652                518                    4,170           -2.3%
     Total                                   15,146              2,399             17,545               15,238               2,482              17,720               1.0%

     Domestic undergraduate tuition
     The Vancouver campus enrolled 31,111 FTEs in fiscal 2018/19. This is projected to remain relatively constant.
     The fiscal 2019/20 budget reflects a 2 per cent increase in tuition rates.

UBC 2019/2020 BUDGET                                                                                                                                               Page 12 of 76
The Okanagan campus enrolled 6,626 FTEs in 2018/19. The fiscal 2019/20 budget assumes a 2 per cent
     increase in tuition rates and a 2 per cent increase in FTEs.

     International undergraduate tuition
     Faculties are planning for a total international enrolment increase of 1.7 per cent. In combination with increases
     in international student tuition (3 per cent for continuing students and 4 per cent for new students), this will
     result in an increase of $49m across both campuses. Intake for fiscal 2019/20 is expected to decrease by 2.3
     per cent, compared to the 2018/19 intake of first-year and transfer students.

     Graduate tuition
     The Vancouver campus budget reflects a 2 per cent tuition rate increase for domestic students and higher
     increases in certain professional programs for international students. . It also includes growth in domestic
     professional programs, largely in UBC Sauder School of Business, Faculties of Forestry, Arts, Science and
     Dentistry. The Okanagan campus budget reflects a 2 per cent tuition rate increase and growth in professional
     programs, primarily the Master of Data Science, in the Irving K. Barber School of Arts and Sciences.

     Other Income
     Investment income
     Investment income represents income earned on cash and operating investments, internal loans and
     construction project financing. The earnings are netted against interest payments on external debt, the Student
     Housing Finance Endowment and the endowment borrowing for Orchard Commons. Overall volatility is mostly
     a function of the variability in working capital balances and the distribution of those balances; for example,
     delays in construction will reduce the interest earned on construction deficits whilst increasing interest earned
     on operating investments. The exposure to interest rate risk is minimal due to fixed rates of interest on internal
     loans and external debt.

     Investment revenue in fiscal 2019/20 is expected to be higher than 2018/19. This is due to expected increases
     in overall cash reserves which will then be invested in UBC Properties Trust promissory notes to fulfill
     upcoming construction financing requirements and several new internal loan advances. In addition, operating
     investments with variable rate terms have increased rates of return corresponding with market interest rate
     increases.

     Research revenue
     Research revenue includes the Federal Research Support Fund (which contributes to the overhead or indirect
     costs of Tri-Council research grants and is calculated, based on a formula, as a percentage of total federal
     research funding, based on a formula), a share of royalty revenue, and cost recoveries from industry
     sponsored research funding. Fiscal 2019/20 is the last year of phasing out UBC central’s share the Canada
     Research Chair (CRC) funding for indirect costs, and now 100 per cent of the funding resides in faculties’
     revenue.

     Business revenue
     Business revenue includes the net return or dividend to the university from ancillary operations (including
     student housing and hospitality, parking, food services and the bookstore) as well as lease income and the
     General Municipal Service Levy (GMSL) charged to businesses on campus. Ancillaries are expected to be
     financially self-sustaining, including setting aside funds for capital renewal and providing a financial dividend to
     the university to be invested in important strategic priorities. Dividends paid each year by the ancillaries are
     determined through the budget process. The operating revenue of ancillaries is included under “Central support
     unit revenue,” and includes Student Housing and Hospitality Services, Bookstore, and Parking

UBC 2019/2020 BUDGET                                                                                           Page 13 of 76
Land development proceeds
     The proceeds from land development are derived from long-term leases and from the net proceeds of market
     rental activities. This enterprise is managed by UBC Properties Trust. Revenue received from long-term leases
     is held in perpetuity as endowments (invested at UBC Investment Management Trust Inc. [“IMANT”] and in the
     Student Housing Financing Endowment and Faculty Housing Assistance Financing Endowment Fund ) to
     support strategic investments. This is expected to generate $23m in fiscal 2019/20 and the net proceeds of
     rental activities are expected to generate $10m. Please refer to Appendix III for further details.

     Faculty revenue
     Faculty revenue represents operating revenue generated by the faculties that flows directly to them (rather than
     being allocated via the tuition allocation model or the budget process). Examples include revenue generated by
     Faculty of Arts’ business development contracts and grants for the Canadian International Resources and
     Development Institute (CIRDI), and Real Estate pre-licensing courses in the UBC Sauder School of Business,
     as well as analytical and core services that faculties bill on a fee-for-service basis.

     Central support unit revenue
     Vancouver central support unit revenue includes revenue from Extended Learning, Vantage College,
     Information Technology, Building Operations, Energy and Water Services, and ancillary units. The revenue
     increase is mainly due to the anticipated opening of the Exchange Residence and MacInnes Field underground
     parkade at the Vancouver campus.

     Okanagan central support unit revenue primarily includes Information Technology, Campus Operations and
     Risk Management, and ancillary units.

     Operating Expenditures
     Operating Expenditures                               UBC Vancouver                        UBC Okanagan                         UBC Total
                                              Actual    Forecast Budget Budget     Actual    Forecast Budget Budget     Actual    Forecast Budget Budget
     (in $millions)                           Fiscal     Fiscal   Fiscal   vs.     Fiscal     Fiscal   Fiscal   vs.     Fiscal     Fiscal   Fiscal   vs.
                                              17/18      18/19    19/20 Forecast   17/18      18/19    19/20 Forecast   17/18      18/19    19/20 Forecast
     Salaries & benefits                        1,056      1,131   1,224      93       102       111     125       14     1,158      1,242      1,349      107
     Operating costs - other                      444        493     533      40        27        34      36        2       471        527        569       42
     Cost of goods sold                            43         43      50       7         -         -       -        -        43         43         50        7
     Grants to third parties                        1          1       1       -         -         -       -        -         1          1          1        -
     Interest expense                              49         51      55       4         2         2       2        -        51         53         57        4
     Capital spending                             131        140     136     (4)        12        14      26       12       143        154        162        8
     Transfers to (from) non-operating fund        52         72      58    (14)         8         8      10        2        60         80         68     (12)

     Total Operating Expenditures               1,777      1,931   2,057     127       151       169     199       30     1,928      2,100      2,256      157

     Salaries and benefits
     The increase in salaries and benefits includes amounts related to general wage increases (GWI), progress
     through the ranks (PTR) for faculty, merit increases for staff, and market adjustments. The remainder of the
     increase is primarily due to new faculty and staff, including expenditures from the Academic Funds. This
     increase will be invested largely in staff and faculty committed to research, teaching, and student support, and
     in building services as we add to our student residences and academic facilities.

     Operating costs-other
     The increase in operating costs-other is primarily due to an increase in operational expenses related to items
     such as supporting various strategic initiatives, increased IT support costs, increased student housing and food

UBC 2019/2020 BUDGET                                                                                                                                    Page 14 of 76
services activity, as well as increased scholarship, fellowship and bursaries amounts related to undergraduate
     and international students, and support from the Academic Funds.

     This category also includes the use of proceeds from land development that are derived from long-term leases
     and from the net proceeds of market rental activities. In the past, the majority of these funds were used to
     support the costs of priority building investments.

     Cost of goods sold
     The increase in cost of goods sold for the Vancouver campus is primarily due to the transition to an in-house
     food service delivery model for UBC Okanagan Food Services, to be operated by UBC Student Housing and
     Hospitality Services.

     Interest expense
     The increase in interest expense is primarily due to loans for new projects in student housing ($2.5m) and the
     Undergraduate Life Sciences Teaching Labs on the Vancouver campus ($2.7m).

     Capital spending
     Capital spending has been identified at the departmental level across the university. These are largely funded
     from current revenue, though, in some cases, units have reserve funds to support this spending. It does not
     include any spending on major capital buildings, except to the extent that portions of those costs come from
     accumulated reserves. This includes library acquisitions, equipment and furnishings, and minor renovations
     funded locally. It also includes the principal payments on any internal loans that will be repaid during the year.
     The increase is primarily due to large capital projects (1540 Innovation Drive and Research Greenhouse),
     equipment replacement, and modular lab and office spaces on the Okanagan campus. Please refer to section
     7 Capital Expenditure for spending details.

     Transfers to/(from) non-operating funds
     The Operating Budget includes interfund transfers to and from other university funds that form part of the
     Consolidated Budget, including research and capital (e.g. the provision of support for research projects
     contained in the Research Fund).

UBC 2019/2020 BUDGET                                                                                           Page 15 of 76
4. UBC Vancouver
     Strategic Initiatives

     The following tables summarize the calculation of the revenue available for allocation, after pre-determined
     allocations to faculties, the Academic Funds and student financial aid, and the proposed allocations for the
     Vancouver campus:
     UBC VANCOUVER - OPERATING BUDGET
     Fiscal 2019/20 Budget on a Differential Basis
     (In $ millions)

     Fiscal 19/20 Outlook                                          One-time          Recurring         Total Fiscal

     Incremental revenue

     International Tuition (Graduate and Undergraduate)                          -            44.6              44.6
     Domestic Tuition (Graduate and Undergraduate)                               -               9.4              9.4
     Provincial Grant                                                            -            19.0              19.0
     Other revenues                                                              -               6.2              6.2
     Uncommitted Land development proceeds                                     .4                 .3                  .7
     Land development proceeds' prior year surplus                            7.1                  -              7.1
     Operating's prior year surplus and recurring reserve                   10.9                 5.6            16.5
                                                                            18.5              85.0             103.5
     Less
     Faculty share of tuition growth                                             -            19.0              19.0
     Excellence fund                                                             -            21.4              21.4
     Student Financial Aid                                                       -               4.0              4.0
     Funding to Faculties and Units (GWI and FTE growth)                      (.9)            16.4              15.4
     Operating contingency fund                                               4.2                2.5              6.7
                                                                              3.2             63.3              66.5

     Total available for allocations                                        15.2              21.7              36.9

     Incremental revenues are projected to increase by $103m for fiscal 2019/20, of which $85m is recurring. As
     previously described, some of that increase is allocated to the faculties, Academic Funds and SFA, as well as
     pre-commitments approved by the board, with the remaining $37m of additional revenue available for fiscal
     2019/20 creating an opportunity for UBC Vancouver to fund various strategic priorities and operating initiatives.

UBC 2019/2020 BUDGET                                                                                         Page 16 of 76
UBC VANCOUVER - OPERATING BUDGET
     Fiscal 2019/20 Budget on a Differential Basis
     (In $ millions)

     Fiscal 19/20 Outlook                                           One-time         Recurring         Total Fiscal

     Proposed allocations

      Local & Global                                                           3.5               2.5              6.1
      People & Places                                                          7.0               3.6             10.7
      Research Excellence                                                      2.0               1.4              3.4
      Sustainment / Compliance / Operations / Risk Mitigation                  1.5            12.2               13.7
      Transformative Learning                                                  1.4               1.6              3.0

     Total proposed allocations                                             15.5              21.4               36.9

     The recommendations for fiscal 2019/20 are the result of extensive consultations across campus that included
     senior leadership, faculty, staff, and students. A budget advisory group conducted a thorough review of the
     detailed proposals and provided their recommendations to the Provost and the Vice-President, Finance and
     Operations based on the feedback received through the consultation process. The recommendations are
     consistent with the new UBC Strategic Plan.

     Strategic Theme
     People and Places
     Funding is proposed to implement and sustain the Procurement Modernization Initiative following the review of
     the university’s procurement and payment processes; sustain the Independent Investigations Office operations;
     support a transit office to promote the extension of the transit corridor to the university; support for the Blue &
     Gold Campaign; support for the University Neighbourhood Association. Funding will also be made available to
     support market adjustments for some administrative staff salaries, and an alignment of contributions to the staff
     pension plan.

     Research Excellence
     Funding is proposed for: the library collections, including monographs, which are impacted by fluctuations in
     the US$ exchange rate; the new Vice-President Health portfolio to coordinate and align the teaching and
     research for UBC’s health profession programs.

     Transformative Learning
     Funding is proposed for: expanded Collegia, digital experience, and faculty fellows and student leaders for all
     1st year students; work to strengthen the UBC-Musqueam relationship; an Integrated Health Clinic for students;
     and a new organizational structure in Undergraduate Admissions designed for higher performance in
     responding to prospective students and greater efficiency.

     Local and Global Engagement
     Funding is proposed for UBC to better brand and position itself domestically and internationally; increased
     support for fundraising; hosting the Congress of Humanities & Social Sciences conference and UBC Connects
     series; enhanced support of the Indian Residential School History & Dialogue Centre; and UBC Carnegie
     Elective Classification for Community Engagement (Canadian Pilot).

UBC 2019/2020 BUDGET                                                                                          Page 17 of 76
Sustainment/Compliance/Operations/Risk Mitigation
     Funding is proposed for the continued upgrading of classroom and learning spaces; upgrading, replacement
     and renewal of the major IT platforms that have university-wide impact; upgrading of the space for the Office of
     the Vice-President Research & Innovation; matching funding for provincial routine capital projects;
     supplemental funding for the engagement of contracted occupational first aid services (OFA2); funding for
     copyright compliance through UBC Library Online Course Reserves (LOCR) and CANVAS, UBC’s cloud-based
     learning management system.

     Academic Funds (formerly the Strategic Investment “Excellence” Fund)

     The university is a globally recognized centre of research and educational excellence, and our goal is to enhance
     this excellence through targeted strategic investments on both campuses. The Academic Funds (formerly the
     Strategic Investment “Excellence” Fund) was established in February 2016 to support the university’s ambition
     to become Canada’s best university over the next decade.

     The fund supports strategic initiatives that will enhance and amplify current efforts in key areas, to ensure the
     university is:

           a) Recruiting and retaining exemplary faculty members, students and staff,

           b) Building and supporting world class research infrastructure to enable innovative, cutting-edge research,
              and

           c) Providing an excellent student learning experience for domestic and international students, at the
              graduate and undergraduate levels, both inside and outside the classroom.

     The board will consider revising and renaming the funds at the April 2019 meeting of the UBC Board of
     Governors. A separate report is provided. In that report, there is a recommendation to stratify the Vancouver
     campus Academic Fund as follows:

       •    Strategic Excellence Fund
       •    Revenue Sharing Fund
       •    Student Financial Aid Fund
       •    Academic Capital Fund
       •    Integrated Renewal Project Fund

     A. Strategic Excellence Fund
     Commitments for Fiscal 2019/20
     People and Places
     An outstanding university is defined by the quality and diversity of students and faculty that it attracts. The
     university continues to commit funds to support the attraction and retention of both.

     The Blue & Gold Campaign for Students continues into its second successful year as funds continue to be
     provided as matching funds for new gifts to select Blue & Gold campaign priorities. Discussions are underway
     for considering increasing the matching fund commitment over the five-year period.

     Funds continue to be committed to support awards for retention of exemplary faculty under the Distinguished
     University Scholars Program. Funds also continue to support the research activities of Killam Professors and

UBC 2019/2020 BUDGET                                                                                              Page 18 of 76
Canada Research Chair holders. Housing has been described as one of the main barriers the university faces
     in retaining and attracting faculty to Vancouver even in the current market. To continue to enable UBC’s
     recruiting and retention of exemplary faculty, funding continues to be committed to support the Housing Action
     Plan, including an approved increase in the average annual commitment envelope for the Prescribed Interest
     Loan Program from $10m to $15m to accommodate increasing demand for this program.

     Allocation: $9.5m

    Local and Global
    In advance of the approval and implementation of the Indigenous Strategic plan (ISP), funds have been
    committed to invest in initiatives that will be well aligned to the plan. This will allow us to move more quickly
    with the implementation of the ISP, once approved, and to identify opportunities for further funding more
    quickly. The plan identifies recruitment, curriculum and research support infrastructure that needs to be
    established to attain the goals identified in the UBC Strategic Plan. In addition to initiatives identified under the
    ISP, certain faculty initiatives supporting indigenous communities have also been committed. These include
    support for the development of the Diploma of Arts offered free of charge for indigenous learners and funds to
    support the recruitment of faculty members for the School of Public Policy and Global Affairs in the areas of
    Indigenous Policy Studies & Migration/Refugees.

    Allocation: $2.6m

    Building and Supporting Research Excellence
    The research action plan developed by the VP Research and Innovation continues to support established and
    emerging research clusters, including innovation and knowledge mobilization as major initiatives for the
    university. An open call for proposals was launched called “Program for Undergraduate Research Experience”
    as the university is looking for innovative pilot projects that will enhance the undergraduate research
    experience. Submissions to date have been tremendous as considerable interest has been shown by the
    community.

    The university continues to be committed to supporting the development of the digital research infrastructure to
    provide faculty the ability to enhance their research productivity and accelerate time to discovery and
    innovation. Year 2 funding of the 3-year capital investment for critical upgrades to the UBC University Data
    Centre (UDC) has been committed. Expansion of the recurring operating sustainment base to support this
    infrastructure has also been committed starting 19/20.

    In February 2018, the Government of Canada announced five successful applicants in Canada’s $950m
    Innovation Superclusters Initiative. The university is a founding member of the BC-based Canada’s Digital
    Technology Supercluster, which was a successful applicant. Investment from the Academic Funds will be
    made through UBC’s subsidiary.

    Allocation: $33.9m

    Transformational Learning
    Students desire a career path that is integrative of all that they have become at the university. An action plan
    developed through consultation with students and faculties by the Vice-President Students. The university
    continues to support the expansion of experiential learning programs in the areas of clinical, legal and health
    education. Funds have been committed to further support the expansion of co-op programs.

UBC 2019/2020 BUDGET                                                                                            Page 19 of 76
A report was received from The Alma Mater Society (AMS), which was helpful to identify areas of funding
     consistent with the action plan developed by the vice-president students. Some of these additional
     commitments include: funding for the development of Open Educational Resources to alleviate the high cost of
     learning materials on students and the expansion of the on campus work learn program in addition to
     implementing an off campus work learn pilot that will broaden the availability of work experiences so that all
     students have the option of participating in experiential learning.

     Investment in a project to support better classroom scheduling to optimize utilization will come into full gear in
     the coming year. This will improve the student experience by promoting student success as more course
     selection and fewer schedule conflicts can enable faster completion times. It will also improve transparency
     and enable better access to data for more effective decision making by the university academic community,
     and ensure that pedagogical requirements and classroom facilities are well matched.

     Allocation: $4.8m

     Strategic Plan Enablement
     A funding envelope continues to be set aside for an annual open call on strategic pilots that emphasize
     supporting the core areas of the UBC Strategic Plan.

     Allocation: $2.0m

     B. Revenue Sharing Fund
     This fund will provide support to the Faculties and academic units that have limited access to international
     students or have other restrictions that affect their budget sustainability. Allocations that will be applied to this
     Fund include unfunded salary impacts, new initiatives that are campus wide, and other cost pressures affecting
     smaller faculties and academic units.

     Commitments for Fiscal 2019/20
     People and Places
     Support for strategic hires for faculties that have limited access to international tuition has been committed for
     Education and Law. Funding for library support of scholarly writing and librarians has also been committed.
     Funding has been set aside to support the sustainment of salary costs for those faculties with limited ability to
     benefit from international students.

     Allocation: $8.2m

     Transformational Learning
     Projects identified for funding include the implementation of a full digital dental laboratory to support the
     teaching and the delivery of care of current and future advances in Digital Dentistry plus the infrastructure
     development of the new Bachelor of Pharmaceutical Sciences degree program over a two year period.

     Allocation: $0.9m

     C. Student Financial Aid Fund
     A gap in funding bursaries for domestic students is estimated to be $6.4m, which will be funded through an
     allocation from the Academic Funds.

     Allocation: $6.4m

UBC 2019/2020 BUDGET                                                                                            Page 20 of 76
D. Academic Capital Fund
     This fund is planned to start in fiscal 2020/21 initially at $5m, with annual growth by $5m, until $25m is reached
     in fiscal 2024/25 to support debt servicing of academic capital projects.

     E. Integrated Renewal Project (IRP) Fund
     Starting fiscal 2020/21, a fixed envelope of $10m has been identified as an ongoing funding requirement to
     supplement operational funding to advance and maintain our technology platform to match current
     requirements.

     Total Academic Funds at UBC Vancouver

      Total Academic Fund (UBCV)           Strategic Excellence Fund           Revenue Sharing Fund              Student Financial Aid Fund                 Total Academic Fund

      (in Thousands)                        Plan      Forecast     Plan      Plan     Forecast      Plan        Plan       Forecast       Plan        Plan        Forecast    Plan
                                           Fiscal      Fiscal     Fiscal     Fiscal    Fiscal       Fiscal      Fiscal      Fiscal       Fiscal       Fiscal       Fiscal     Fiscal
                                           18/19       18/19      19/20      18/19     18/19        19/20       18/19       18/19        19/20        18/19        18/19      19/20

      Total Funding Available              39,288      39,050     40,872         -         -        13,249          -           -         6,350        39,288      39,050     60,471

        Local and Global                       555        502      2,626         -         -             -          -           -            -              555       502      2,626
        Transformative Learning             1,045       1,713      4,833         -         -         1,583          -           -            -          1,045       1,713      6,416
        People and Places                  19,287       7,237      9,474         -         -         7,429          -           -         6,350        19,287       7,237     23,253
        Research Excellence                20,454      22,945     33,908         -         -             -          -           -            -         20,454      22,945     33,908
        Strategic Pilot Enablement          4,000         137      2,000         -         -             -          -           -            -          4,000         137      2,000
      Total Commitments                    45,341      32,534     52,841         -         -         9,012          -           -         6,350        45,341      32,534     68,203

      Net Surplus/Deficit                   (6,053)     6,516     (11,969)       -         -         4,237          -           -            -         (6,053)      6,516      (7,732)
        Opening Carryforward               13,588      13,629     20,145         -         -             -          -           -            -         13,588      13,629     20,145
      Ending Carryforward                   7,535      20,145      8,176         -         -         4,237          -           -            -          7,535      20,145     12,413

     UBC Vancouver Faculties and Departments – Allocations and Projected
     Expenses

     The following tables show the fiscal 2019/20 projected funding and expenses by unit, including both allocations
     from the government grant and tuition, as well as revenue generated directly by the faculties and central
     support units.

     Summary

                                                                                                                            Reserve         Ending
                                                               Funding     Unit            Total           Total
               UBC Vancouver (in $thousands)                                                                             (Drawdowns)       Reserve           (Drawdowns) Additions
                                                             Allocations Revenues         Funding        Expenses
                                                                                                                           /Additions      Balance

      Faculties                                                   759,916       180,079        939,995         940,150           (155)           224,473
      Student Financial Aid                                        79,884             -         79,884          79,402             482              3,987
      Central support units (including ancillaries)               523,208       435,439        958,647       1,004,678        (46,031)           (37,442)
      Total UBC Vancouver                                        1,363,008      615,518   1,978,526          2,024,230        (45,704)           191,018

     Of the funding allocations made for the fiscal 2019/20 budget, 56 per cent have been made to faculties, 6 per
     cent to student financial aid, and 38 per cent to central support units.

UBC 2019/2020 BUDGET                                                                                                                                                         Page 21 of 76
The total reserve drawdown for the Vancouver campus is $46m.

     Faculties and Departments
     Overall, the net position of the faculties is projected to be virtually balanced.

                                                                                                    Reserve       Ending
                                                       Funding      Unit      Total       Total
              UBC Vancouver (in $thousands)                                                      (Drawdowns)     Reserve     (Drawdowns) Additions
                                                      Allocations Revenues   Funding    Expenses
                                                                                                   /Additions    Balance

      Faculties                                         759,916    180,079   939,995      940,150       (155)     224,473
       Faculty of Applied Science                         88,506     6,387     94,893       92,921      1,972      35,080
       Faculty of Arts                                   175,664    11,318    186,982      188,299     (1,317)     36,682
       Sauder School of Business                          64,248    30,471     94,719       92,964      1,755      23,711
       Faculty of Dentistry                               13,116    19,478     32,594       32,282        312       4,126
       Faculty of Education                               48,618     7,018     55,636       55,280        356       7,561
       Faculty of Forestry                                22,099     4,523     26,622       29,067     (2,445)      7,524
       Faculty of Graduate and Postdoctoral Studies        3,036     1,772      4,808        4,787         21       1,825
       Faculty of Land and Food Systems                   17,825     4,610     22,435       20,737      1,698      12,461
       Allard School of Law                               14,611       730     15,341       16,432     (1,091)     (2,344)
       Faculty of Medicine                               153,873    77,967    231,840      233,355     (1,515)     73,778
       Faculty of Pharmaceutical Sciences                 20,905     2,294     23,199       23,034        165       8,576
       Faculty of Science                                137,415    13,511    150,926      150,992        (66)     15,493

     The addition to the Faculty of Applied Science reserve is primarily due to the forecasted growth of
     undergraduate and graduate programs combined with international and graduate tuition rate increases, and is
     partially offset by increases in salary and benefit costs. The faculty is planning to invest in new capital
     infrastructure.

     The drawdown to the Faculty of Arts reserve is primarily due to the increase in faculty and staff salaries and
     benefits and investment in capital projects (i.e., Kenny Building renovation for new research space to support
     newly-appointed faculty members).

     The addition to the UBC Sauder School of Business reserve is primarily due to projected enrolment in all
     professional graduate programs and tuition rate increases for international students for the Bachelor of
     Commerce program. The school is planning to invest in new capital infrastructure.

     The drawdown to the Faculty of Forestry reserve is primarily due to the recruitment of ten new faculty positions
     and the decrease in logging revenue from the faculty’s research forests.

     The addition to the Faculty of Land and Food Systems reserve is primarily due to increases in tuition allocation,
     which are partially offset by increases in salary and one-time capital expenditures.

     The drawdown to the Allard School of Law reserve is recurring, primarily from hiring new faculty and staff in
     addition to increases in salary and benefit costs.

     The drawdown to the Faculty of Medicine reserve is recurring, primarily due to unfunded wage increases.

     Faculty budgets remain constrained; however, the overall financial position is projected to remain stable in
     fiscal 2019/20. There is an average tuition rate increase of 9.65 per cent for international undergraduate
     students, which is the effect of differential rates of increase flowing through all years.

     Faculties are continually examining their cost structures by finding more effective ways to deliver their core
     academic programs while enhancing the quality of teaching, research and student support. The Faculty of
     Education now eliminates their structural deficit with various initiatives carried out from the Programmatic

UBC 2019/2020 BUDGET                                                                                                                           Page 22 of 76
Sustainability Initiative (PSI) process started in 2016/17. The Faculty of Medicine has undergone intensive
     reviews of their academic and non-academic programs and found opportunities that have considerably
     improved their budget outlook without compromising quality.

     Student Financial Aid

                                                                                                           Reserve       Ending
                                                          Funding      Unit          Total       Total
               UBC Vancouver (in $thousands)                                                            (Drawdowns)     Reserve      (Drawdowns) Additions
                                                         Allocations Revenues       Funding    Expenses
                                                                                                          /Additions    Balance

      Student Financial Aid                                 79,884           -        79,884      79,402        482         3,987
       SFA Graduate                                          21,948             -     21,948       21,785       163         1,924
       SFA Undergraduate Domestic                            18,806             -     18,806       17,917       889         1,297
       SFA Undergraduate International                       26,793             -     26,793       27,219      (426)          612
       Workstudy, Go Global - SFA, Int'l Tuition Award       12,337             -     12,337       12,481      (144)          154

     The small addition to the SFA Undergraduate Domestic reserve is due to anticipated increases in SFA awards
     that have been covered by additional funding from the Academic Funds.

     The SFA Undergraduate International drawdown is to utilize prior year reserves.

     Central Support Units (including ancillaries)

                                                                                                           Reserve       Ending
                                                          Funding      Unit          Total       Total
               UBC Vancouver (in $thousands)                                                            (Drawdowns)     Reserve      (Drawdowns) Additions
                                                         Allocations Revenues       Funding    Expenses
                                                                                                          /Additions    Balance

      Total Central Support Units (incl. ancillaries)     523,208     435,439       958,647    1,004,678    (46,031)     (37,442)

      Provost and VP Academic                              165,718     81,012       246,730      249,381     (2,651)      21,787
       Library                                               42,126        940        43,066       43,305       (239)        985
       Information Technology                                66,840     28,185        95,025       93,123      1,902       5,179
       Extended Learning                                        137     16,688        16,825       15,707      1,118      (1,150)
       Enrolment Services                                    13,725        488        14,213       14,658       (445)       (171)
       International Student Initiative                       8,507          -         8,507        8,829       (322)        204
       Vantage College                                          160     20,090        20,250       19,835        415       3,705
       Centre for Teaching, Learning and Technology           8,532        500         9,032       10,129     (1,097)        424
       Other Provost and VP Academic units                   25,691     14,121        39,812       43,795     (3,983)     12,611

      VP Students                                           33,693    281,740       315,433      316,010       (577)      29,027
       Athletics and Recreation                               2,492     31,443        33,935       34,970     (1,035)     (3,345)
       Housing and Hospitality Services                         757    209,037       209,794      208,148      1,646      27,919
       Student Development and Services                      19,468      2,956        22,424       22,522        (98)        450
       University Community Services                          7,329     38,304        45,633       46,406       (773)      3,594
       Other VP Students units                                3,647          -         3,647        3,964       (317)        409
      VP Finance and Operations                            128,833     41,588       170,421      171,631     (1,210)        4,990
       Energy and Water                                      29,281     26,306        55,587       55,079       508         1,535
       Building Operations & Infrastructure Devl't           74,232     13,118        87,350       88,220      (870)          794
       Other VP Finance and Operations units                 25,320      2,164        27,484       28,332      (848)        2,661
      Academic Fund                                          60,471             -     60,471       68,203     (7,732)     12,413
      Governance                                             11,883        31         11,914       13,115     (1,201)      (2,258)
      VP Development and Alumni Engagement                   28,787       155         28,942       29,292      (350)         (250)
      VP Health                                               2,969         8          2,977        2,698       279         1,905
      VP External Relations                                  18,796      3,542        22,338       24,378     (2,040)       2,628
      VP Research and Innovation                             26,537     13,635        40,172       40,702      (530)        7,389
      VP Human Resources                                     16,429      7,500        23,929       23,941        (12)       1,339
      Campus Wide Expenses                                   29,092      6,228        35,320       65,327    (30,007)    (116,412)

     Within Provost and Vice-President Academic, the increased reserve for Information Technology is due to fewer
     IT small projects being taken on in fiscal 2019/20. The accumulated resources are for the Application
     Ecosystem to support the Integrated Renewal Program in the future years. The addition to Extended Learning

UBC 2019/2020 BUDGET                                                                                                                                   Page 23 of 76
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